Sample Ethics Case—Conflicts of Interest: Just Trying to be Helpful

Ethical Dilemma:

You are chief development officer for a youth organization. The organization hosts an annual Celebration Dinner which includes a program book which lists donors who have not asked to be anonymous. In action, donors are recognized on your website and in your annual report. Your board chair’s son, Martin, whose company is an event sponsor, attended the Celebration Dinner.  Several months after your Celebration Dinner you learn from a donor that Martin is calling donors to the organization to solicit business for his investment company. The donor got a call on their personal cell phone which, according to the donor, “is very hard to get.” The donor expressed anger and dismay that a board member’s son was “cold calling” donors to the youth organization.   The donor accuses the youth organization of giving Martin the information – and says he is considering making a post on his social media accounts to warn the public that the youth organization is sharing confidential information randomly – and wonders if it was the board chair.

Who’s involved:

• The event attendee
• The son, Martin
• The Board Chair 

What are the possible ethical issues; who else might be impacted?

• What did/could the son’s behavior imply?
• Did the son access or use any confidential information?
• Did the son imply or state that your board chair is somehow involved or supportive of these calls?

What are some possible considerations or solutions?

Internal Assessment: 

Prospect information management:

• Do your solicitation materials make it easy for donors to identify and select an “I/We want to remain anonymous option?”
• Names that are in the public domain, such as digital or print donor lists, are not confidential. The Celebration Dinner list is not confidential.
• There are ethical ways to research individuals, including addresses and telephone numbers.  

Policies and Procedures

• Does the youth organization have a conflict of interest statement, which includes confidentiality, signed by all members of the staff, board and volunteers.
• Does the youth organization have a data security policy and procedure which is carefully and consistently followed.
• If you have a prospect research program, and is implementation based only on publicly available information?

Related Ethics Standards:

Standard 10:  Disclose all potential and actual conflicts of interest. Such disclosure does not preclude or imply ethical impropriety.

• Do you need to alter your sponsorship material to include a statement about information obtained as a result of sponsorship that may not be used for commercial purposes?

Standard No. 19:  Protect from disclosure confidential information to unauthorized parties as defined by an organization’s policies and procedures.

• Regardless of whether the information was obtained ethically or inappropriately, review your internal policies and procedures to make sure that everyone on the staff, board and volunteers are fully informed as well as sign an acknowledgement that they understand and will observe the conflict of interest statement and policy.
• Consider adding a document or event-specific confidentiality addendum to any materials being shared to remind the individuals receiving the information of the importance to protect the information being shared.

Steps you can take:

Internal Steps:

• Inform your Executive Director. Develop a plan to review procedures, in case there may have been an internal breach of donor confidentiality.
• Given the relationship with the Board Chair, the Executive Director needs to be the point of contact.
  • The whole situation could be a coincidence.  The activities in question are those of the son of the Board Chair which could give an appearance of impropriety or misconduct.  It might be advisable to have Martin cease soliciting business for his investment company from donors, even those whose names are public.
• Determine who will call Martin, and the talking points.
  • Is Martin using the Celebration Dinner list for prospecting?
  • How did he access the telephone Numbers?
• Document everything!

Call Martin:

• Discuss whether Martin is using one of the youth organization’s donor lists as a prospect list.
• If Martin reports yes, he is using one of the youth organization’s donor lists, probe how he obtained telephone numbers.
  • If he confirms it was an external search, you have no breach, but the potential appearance of impropriety remains.
  • If he confirms it came from an internal list, he “saw” on a visit to the office, or got it from his parent, further action is mandated. The Executive Director must advise the Board chair that this practice is a violation of the Conflict of Interest Policy and Annual Statement which each Board member has signed, is unethical, and must stop.  
• Document everything!

Call the Donor:

• Thank the donor for bringing the matter to your attention.
• If the phone number was obtained ethically, do your best to explain that to the donor.
• If the phone number was obtained inappropriately, apologize to the donor and assure the donor that all necessary steps are being taken to prevent this from happening again.

What are the likely outcomes if nothing changes?

• The donor develops the perception that the organization doesn't care about donor privacy, posts on their social media, and a much larger issue potentially damaging the organization's reputation and brand develops.
• The organization's fundraising declines because of the negative social media posts.
• If the board chair shared the information with Martin, the board chair never develops an understanding that the organization’s reputation has been damaged because of this conflict.

What could have made the outcome(s) more ethical?

• Regularly and consistently reinforce the need to protect the organization's brand by making sure all people involved as staff or volunteers protect and safeguard information privacy including but not limited to donor information.
• Do not allow confidential information, such as phone numbers for a thank you program. to leave your building.  Or, if it does, be sure the people receiving the information sign a confidentiality statement related to each specific document.